Financial markets

[Tron]

Bwahahahaha You couldn’t even make this shit up.

 

The Bank of England is about to show the world what it looks like to run QE while also raising interest rates.

It should now be painfully obvious that this situation is well and truly fucked.

Edited September 28, 2022 by Tron

[Sharpe]

1 hour ago, Tron said:

Bwahahahaha You couldn’t even make this shit up.

 

The Bank of England is about to show the world what it looks like to run QE while also raising interest rates.

It should now be painfully obvious that this situation is well and truly fucked.

Oh dear. Lol. Might put Gordon Brown to shame.
 

 

[major-mark63]

So all who lost lot of asset in their pension plans gonna have to work longer so its a great thing for lack of work force....

[Tron]

[FunStick]

I lost a good chunk of money from a reverse split.  It went up a bit to lower my DCA, but I flaked, took my loss and put it in two other etfs for the time being. 

[Tron]

This is a great summary of what’s happening in the UK for those interested. 

 

 

Edited October 1, 2022 by Tron

[Tron]

Credit Suisse CDS (credit default swaps) not looking too good. Thinking we’re gonna have another Bear Sterns / Lehman moment very soon when a large investment bank goes under.

[Tron]

This is NOT a run of the mill bear market.

You can think of every single global risk asset’s risk as being priced off the US long bond (sometimes referred to as the “risk free rate”). Due to QE, the long bond was wrongly priced. Now it is normalizing.

Every single global risk asset (equities, real estate, whatever) should have a risk premium on top of the US long bond. Due to QE this risk premium became effectively zero, or close to zero, over the last few years.

Due to the suspension of QE, every single global risk asset is now being repriced against a normalizing US bond yield and normalizing risk premium. This, in effect, means that the discount rate for each and every global risk asset is rising by between 2% and 10%.

The effect of raising the discount rate for a risk asset from low single digits to mid- to high-single digits/low double digits will cut the value of every single global risk asset (beyond short-term credit) by 20% to 50%, or more.

Should inflation remain sticky, this downward repricing will not be reversed, unlike after the dot com bubble and GFC of ‘08.

We are at the beginning of a likely permanent, once-in-a-generation, downward repricing of every single global risk asset after a likely permanent, once-in-a-generation, upward repricing of the discount rate for all risk assets.

Despite the year-to-date decline in global risk asset prices, many investors still haven't really grasped that 1) the repricing still has a long way to go and 2) there will be no rebound at the other end until we have some sort of Plaza Accord 2.0 / new global monetary system. The petrodollar is dead. Globalization is dead.

[WeednFeed]

Well I haven’t read all these posts, just a few. As far as I’m concerned I saw this shit show coming several years ago. I believe the only reason this hadn’t happened earlier was due to Covid. QE is political bullshit in my eyes.  Stupid WAY TOO LOW interest rates just hooks too many people into a false sense of SPENDING. 

Years ago when I was young I stupidly voted LIBERAL! I was blinded by the Liberal spending promise’s of JOB CREATION,  

It didn’t take very long in my younger life to realize marriage owning any kind of assets called for fiscal responsibility, you know pay your bills on time or THE BANK MAN WILL COME to take back HIS STUFF. 
So life’s lesson is I pay my debts or I LOOSE what I’ve accumulated. Pretty simple stuff. 
So the government’s of the day promises big spending, big borrowing for job creation oh let’s print more money and practice QE. 
The thing is Government has no money, government have TAXES the middle class in most modern countries are expected to PAY MORE TAXES to take up more government dept. 
IF I RAN MY HOUSEHOLD LIKE THE GOVERNMENTS OF THE DAY RUN BUDGETS SOMEONE WOULD FORECLOSE ON ME. 
All political promises COST $$$$$. Some has to pay that someone is YOU,

All my money is in Credit Union GIC’s 3.25, 4.50. 4.60, and 4.7%. I no longer deal with big banks, in Canada all the big banks show profits from 2-2.8 billion per QUARTER. 

[Sammy]

Who do you want to tax instead? And then... we have shit politics that try to answer that. And here we are stuck in the middle. Fortunately I dont have any debts, other than whatever I have to put on my card for a short time and pay it off. Unforeseen car repairs and such. They are helpful to maintain a firewall, so to speak, between spending and my bank account in case there are issues, disagreements, or worse.

Could be worse. You could trust in bitcoin.

[Tron]

[Sharpe]

On 10/2/2022 at 10:47 AM, Tron said:

This is NOT a run of the mill bear market.

You can think of every single global risk asset’s risk as being priced off the US long bond (sometimes referred to as the “risk free rate”). Due to QE, the long bond was wrongly priced. Now it is normalizing.

Every single global risk asset (equities, real estate, whatever) should have a risk premium on top of the US long bond. Due to QE this risk premium became effectively zero, or close to zero, over the last few years.

Due to the suspension of QE, every single global risk asset is now being repriced against a normalizing US bond yield and normalizing risk premium. This, in effect, means that the discount rate for each and every global risk asset is rising by between 2% and 10%.

The effect of raising the discount rate for a risk asset from low single digits to mid- to high-single digits/low double digits will cut the value of every single global risk asset (beyond short-term credit) by 20% to 50%, or more.

Should inflation remain sticky, this downward repricing will not be reversed, unlike after the dot com bubble and GFC of ‘08.

We are at the beginning of a likely permanent, once-in-a-generation, downward repricing of every single global risk asset after a likely permanent, once-in-a-generation, upward repricing of the discount rate for all risk assets.

Despite the year-to-date decline in global risk asset prices, many investors still haven't really grasped that 1) the repricing still has a long way to go and 2) there will be no rebound at the other end until we have some sort of Plaza Accord 2.0 / new global monetary system. The petrodollar is dead. Globalization is dead.

Does it have one last major rally in it though? When will the fed pivot? Is it too late? Going to be interesting to see lol. 

[Tron]

4 hours ago, Sharpe said:

Does it have one last major rally in it though? When will the fed pivot? Is it too late? Going to be interesting to see lol. 

Given where the VIX currently sits, 2% daily volatility is to be expected. There will be no pivot this year for sure..regardless of the UN and IMF begging for one. This week I'll be adding back some of the short positions I covered on Friday. Also adding more put spreads out to December on SPY and QQQ.

[Tron]

On 10/3/2022 at 9:23 PM, Tron said:

Yep….. https://www.wsj.com/articles/opec-agrees-to-biggest-oil-production-cut-since-start-of-pandemic-11664978144

 

 

 

[Tron]

[Tron]

Anyone that thinks Bitcoin is useless, doesn’t understand credit risk. 

[Tron]

Time to plan another trip to the UK. 

[Sammy]

Why it debt pronounced 'det' but debit is pronounced exactly as its spelled?

[Tron]

Probably nothing….

[Tron]

The last time the U.S. markets faced a drawdown of this magnitude, the U.S. Government defaulted upon its gold peg within the next 24 months. 

1933 - Executive order 6102
1971 - Nixon Shock
 

Powell’s choice is either inflation, or Great Depression 2.0, not inflation or soft landing.

 

 

[Tron]

[Tron]

[Icequeen]

This is all so crazy. I actually just started not too long ago in investing. I was doing so well. Then I got scared and threw everything in my Roth.

[TBB]

It's all manipulated - if you catch it right you're rich - the rest of us are just >IDIOTS<

[Tron]